Disrupting technologies, increasing competition and economic pressures makes P&C insurance to look beyond traditional strategies.
A shift is going on in the P&C insurance sector. In this shift some will emerge as leaders, many falling behind, and another group may be wiped out from the market. Year 2016 continues with market disruption. What are the forces that disrupt the market? How it affects processes and stakeholders is a hot discussion already. Now let us delve deeper.
First and foremost is disruption due to innovations and new product development. Innovations are great levelers as well as a destroyers. Just look at the potential of IoT in changing insurance business. IoT is adding new tasks for the insurers. Wearable devices, automobiles, transmitters, medical equipment’s, security systems, doors, lights etc., are providing insurers to segment markets and create new price models for the P&C market.
Emergence of sharing economy where assets are shared is creating opportunities for the property and casualty markets. This means insurance companies need to create new pricing models to tap those assets.
Are agents being replaced?
Digital technologies are throwing a spanner in the established property and casualty markets. Before digitization threats insurers employ agents to educate the customers. But the growing digitization phenomenon is slowly eliminating the key role played by agents as a medium between insurers and customers. For example, Google Compare helps customers to compare different products online, where customers can buy the products directly from the insurer. This may have a bearing on the premium as the commissions paid to the agents can be given as a discount to the customer.
Thanks to digitization P&C customers are expecting personalized services like access anytime anywhere. This is making the customers happy where Millennials being the target and at the same time it is opening up risks like cyber security and hacking. Such risks can impact on the credibility of the insurance carriers. Today IT solutions come with additional embedded layers of protection to protect data assets.
The growing connected car with mobile telematics applications is redefining the traditional price models. The traditional model is being replaced by usage based insurance (UBI). This will empower the drivers to gain discounts on their driving behavior. The lesser the risk, the lower will be the premium. This trend is opening up opportunities for mobile application providers to come out with premium features in mobile telematics application. User friendly features like gamification and ancillary services like roadside assistance are a few examples to cite.
Underwriting involves collection of information with precision and accuracy. Big data is churning the property and casualty insurance sector. Big data technologies help in making underwriting effective with crime statistics and risk assessment leading to more accuracy in the underwriting process benefiting all the stakeholders.
Personalized customer experience
P&C is a competitive and cost-sensitive industry.It requires engaging customer to connect through personalized communications, meticulous evaluations, and speedy claims. Personalized customer experience results in customer retention. Therefore, robust mobility solutions are required for insurance companies to initiate the issuance of policies, claims processing without going to the insurer physically.
Love or loathe it, insurance carriers cannot avoid cloud computing to align with customers who prefer to have access on business over their mobile. Therefore insurance mobility holds the key for P&C insurers. Key brokering, claims, underwriting, re-insurance and accounting need to be enabled with solutions to speed up customers’ appraisals and claims consistently, at reduced cost. The bottom line here is reducing the claim processing time. This will help in improving customer engagement through multi-channel delivery for clients. Moreover, this makes easy setting appointments, report losses, and receive notifications as and when required.